Adding to the general gloom on the Street today was the release of the latest Federal Open Market Committee's (FOMC) meeting minutes. More specifically, the edited minutes of the policymakers' closed-door meeting on October 28 and 29 revealed that Fed governors and bank presidents expect the U.S. economy to contract moderately in the latter half of 2008, continuing into the first half of 2009.

When the economic respite does come, the committee expects the recovery to be "relatively gradual," predicting that "financial stresses would recede only slowly, notwithstanding the extraordinary measures that had been taken." The meeting attendees downgraded their formal economic forecasts, with the consensus now expecting gross domestic product to grow between 0% and 0.3% in 2008, and dock between negative 0.2% and positive 1.1% in 2009. At their last meeting, the members predicted growth between 1% and 1.6% in 2008, and between 2% and 2.8% next year.

Meanwhile, the Fed expects inflation to subside materially in the coming quarters "to levels consistent with price stability." The policymakers predict inflation to moderate to a 1.3% to 2% pace next year, with core inflation forecast at 1.5% to 2%.

Furthermore, the FOMC now predicts the unemployment rate to average between 6.3% and 6.5% at year's end, and 7.1% to 7.5% in 2009. Three months earlier, the FOMC projected unemployment to remain below 6% throughout the period.

Last night, Pacific Sunwear of California, Inc. said it narrowed its fiscal third-quarter loss and total sales dropped 5% as consumers continued to cut back on spending. Today, the shares of PSUN were busy being hit with a number of brokerage actions.

Specifically,

• Friedman, Billings, & Ramsey cut its price target from $3 to $2, and reiterated its "market perform" rating.
• UBS raised the shares from "sell" to "neutral."
• The shares were upgraded at Citigroup from "sell" to "hold."
• Wedbush slashed its price target from $3 to $2, while reiterating its "hold" rating.
• Credit Suisse lowered its price-target estimate from $6 to $3.
• Mkm Partners upgraded the firm from "underperform" to "hold."

Not unlike most retail stocks, PSUN has had a rough year. The equity has dropped more than 90% during the past 52 weeks, and when compared to the SPX 500 Index (SPX), the security has trailed the indicator by 70% during the past 40 days.

According to Zacks, all of the analysts covering PSUN currently rate the shares a "hold" or worse, which doesn't seem surprising considering the stock's technical performance.

However, what is surprising is the amount of optimism from option players. The stock's Schaeffer's put/call open interest ratio (SOIR) is docked at 0.27, indicating that calls far outnumber puts among options slated to expire within the next 3 months. Further pointing to bullish sentiment, during the past 10 trading days on the International Securities Exchange (ISE), investors have purchased more than 27 calls for every 1 put. This ratio ranks higher than 95.9% of all other readings taken during the past year, indicating option traders' recent affinity for optimistic bets.

Agricultural firm Potash Corp. of Saskatchewan is slipping this afternoon, shedding nearly 3% after Canaccord Adams cut its price target to $130 from $150. This cut was accompanied by a similar move for sector peer Mosaic , and comes on the heels of a price-target cut by BMO. Monday, POT saw BMO lower its price target to $145 from $155, a move that rolled right off the stock's back - as POT closed only mildly lower. The thing that bothers me about these price-target cuts is the fact that POT is trading near the 70 level -- not the 145 level, the 130 level, or even the 100 level!

Further contributing to my skeptical view is the fact that POT's 10-week moving average is descending through the 95 region. The last time POT finished a month atop this trendline was the middle of June. During the past 26 weeks, POT has slipped 66% - knowing that the year-to-date loss for POT is 51%, it doesn't take a math genius to see that the heaviest losses have taken place recently. Nevertheless, option players are bullishly aligned, as the firm's Schaeffer's put/call open interest ratio (SOIR) of 0.54 is lower than 97% of the past year's worth of readings ... if (and when) this optimism unwinds, the stock could face quite a bit of negative pressure.

To end this blog on a light note, check it out: the God of Thunder rang the opening bell on the NYSE today ... that is a sign that the Apocalypse is upon us; trust me, I have a theology degree.

Late yesterday, KLA-Tencor joined the ever-growing list of companies announcing job cuts. The chip-equipment maker said will reduce its workforce by about 15% amid waning demand for its products. CEO Rick Wallace commented, "Our employees are the heart of our organization, so it is with considerable reluctance that we are proceeding with this necessary reduction." Due to the payroll cuts, KLAC will book an initial charge of $15 million to $20 million on severance expenses.

Analysts at RBC reacted to the news by trimming KLAC's price target from $18 to $14, and reiterating its "underperform" rating. The downwardly revised estimate represents a discount of nearly 17% to the equity's closing price on Tuesday.

At last check, KLAC is attempting to live up to RBC's lowered expectations. The stock is down 5.7%, up ever-so-slightly from its session low of $15.70. Today's nadir marks the equity's lowest price in 10 years.

Yesterday, United Technologies announced that its Chief Financial Officer Greg Hayes will reaffirm its 2008 earnings outlook of $4.90 to $4.95 per share at a meeting with investors. The upper end of this range matches the consensus estimate. Yesterday, the Dow component finished with a gain of 2.4%, but it has given that gain (and more) back today, falling 3.3% at last check. The stock is left searching for support at the 47.50 level, which is currently providing a cushion. If this support fails, the stock could slip to the 45 level - the site of peak put open interest in the November and December series. This options-related support could help stem the stock's weak price action.

What concerns me about UTX is that analysts are extremely bullish toward the firm. According to Zacks, UTX receives 8 "strong buys," 1 "buy," and 2 "holds." Downgrades from this bullish bunch could push the stock lower, and the firm's year-to-date loss of 36% could spur such moves.

Defense firm General Dynamics said today that it will acquire AxleTech International, a producer of axles and other parts for military vehicles, from The Carlyle Group for an undisclosed amount. If there's a credit crunch going on, GD seems oblivious; earlier this month, the company wrapped up its $2.25-billion acquisition of Jet Aviation.

According to General Dynamics, the acquisition is expected to close by the end of the year, and will be immediately accretive to earnings. Troy, Michigan-based AxleTech employs roughly 1,000 workers worldwide, compared to 91,200 employees on the GD payroll.

Investors seem skeptical of GD's recent M&A bender, with the stock down 2% as midday approaches. The shares are riding close to the 52 region, which previously contained their late-October lows.

The shares of MetLife Inc. may be down 66% year-to-date, but Fox-Pitt Kelton analyst Mark Finkelstein continues to believe the insurance concern is a solid pick. He reiterated his "outperform" opinion on the stock this morning, and maintained his $50 price target. In a note to clients, he asserted, "We continue to believe MetLife has the strongest excess capital position of the diversified large cap names (approximately $6 billion) and is positioned to weather both equity market and credit challenges."

Despite Finkelstein's upbeat attitude, MET has actually underperformed the S&P 500 Index (SPX) by 41 percentage points during the past 60 trading days. The analyst's price target indicates similarly over-ambitious expectations for the insurance firm; his 12-month forecast represents a premium of 141% to the equity's closing price yesterday.

So far today, the stock hasn't lived up to Finkelstein's bullish expectations. MET is down 5.3% to trade south of the 20 level; yesterday, the shares dropped to $17.44, their lowest price since May 2000.

Meanwhile, today's early option volume indicates that an investor may be initiating a strangle trade on MET. The stock's January 2009 25 call and 35 call have each seen 5,100 contracts cross the tape so far, with volume outstripping open interest at both strikes.

The solar sector was hit with a mixed bag of commentary from the brokerage community this morning. My colleague Mark Fightmaster zeroed in on MEMC Electronics Materials' glut of price-target cuts in Early Edge, while Elizabeth Harrow commented on J.P. Morgan's bullish initiation of First Solar (FSLR) earlier this morning. Scanning the rest of the sector, I found that Ascent Solar Technologies was also targeted by J.P. Morgan, though with much less favorable results.

Specifically, the brokerage firm cut its rating on ASTI from "neutral" to "underweight," citing increased pricing pressures from lower European subsidies. "Given this view, we recommend investors focus on companies that can absorb margin compression, can cut capex in order to remain FCF positive, and are more likely to remain solvent in light of the possibility of further subsidy reductions in Europe in 2010," J.P. Morgan stated.

Checking with Zacks.com I found that there are very few analysts recommending a "buy" rating on the shares. Currently, ASTI sports only 2 "buys," 4 "holds," and no "sells." This configuration leaves room for additional downgrades that could send ASTI further along its recent downtrend. So far today, the stock has lost more than 4%, pulling back to short-term support at the 3.50 level in the process.

On a final note, J.P. Morgan also cut Evergreen Solar to "underweight" from "neutral." For more on my take on ESLR, be sure to check out tomorrow's edition of the Casual Contrarian.

While VMware options traders have piled into bullishly oriented calls recently, the analyst community has had few nice things to say about the company. In fact, Caris & Co. initiated coverage on the shares this morning with a "below average" rating. The brokerage firm also listed a target price of $18 per share for VMW - a 9.4% discount to the stock's close of $19.88 yesterday.

Caris & Co. isn't alone in its bearish assessment of the shares, as Zacks.com reports that 20 of the 22 analysts following VMW rate the shares a "hold" or worse. However, there is room for price-target cuts on the shares, as Thomson Financial reports that the average 12-month target for VMW rests at $27.33 - a 37% premium to yesterday's close.

Technically speaking, the equity has done little to inspire optimism. The shares are off more than 76% since the beginning of the year, and have recently pulled their 10-day and 20-day moving averages into a bearish cross. The stock is struggling to maintain support at the round-number 20 level, bouncing back above this psychologically important region in today's trading. However, any weakness or bearish activity from Wall Street analysts could send VMW down for a retest of support at the 18 level.

Google was started with a "sell" rating this morning at Monness, Crespi, Hardt, but that apparently wasn't enough of a downside catalyst for CEO Eric Schmidt. At a Wall Street Journal CEO conference, Schmidt confessed that "Basically, everyone is worried about revenue." Although he voiced his support for the speedy passage of a stimulus package by Congress, Schmidt didn't offer a comment on Google's own revenue outlook.

Shares of the Internet-search giant are down about 3% as midday approaches, and they're resting on tenuous support near the 290 level. So far, GOOG hasn't yet closed a day beneath this round-number region, though a few intraday breaches of the level have occurred.

Now that GOOG is down 57% year-to-date, option players are beginning to display a bearish bias toward the stock. On the International Securities Exchange, the shares have garnered a 10-day put/call ratio of 1.36. This reading indicates that more puts than calls have been purchased on Google during the past 2 weeks, and it ranks just 3 percentage points from an annual pessimistic peak.

The shares of J.C. Penney arrived this morning at a multi-year low after Fitch Ratings revised its outlook to negative on the retailer's long-term issuer default rating of "BBB." The current rating is 2 notches above "junk" status, and the downwardly revised outlook suggests that a downgrade to this already-low opinion may be forthcoming.

The ratings firm said that it expects operating environments to remain challenging through 2009, with same-store sales and margins coming under fire from weak sales trends and heightened promotional activity. However, Fitch did note that JCP's liquidity remains strong, and its free cash flow could turn positive next year.

After dropping to $16.36, its lowest price since July 2003, JCP has rebounded and is roughly 1% higher in the first 90 minutes of trading. A wealth of pessimism already exists on the stock; during the past 10 days, the equity has racked up a put/call ratio of 4.49 on the International Securities Exchange. This reading ranks just 6 percentage points from an annual bearish peak.

Alpha Natural Resources will receive $70 million from Cliffs Natural Resources following news that the 2 firms have terminated their merger agreement. According to a press release issued late Monday, "each board's decision was made after considering various issues, including the current macroeconomic environment, uncertainty in the steel industry, shareholder dynamics and risks and costs of potential litigation."

Alpha and Cliffs also stated that they plan to work together "to realize synergies in their respective coal operations." One synergy that's already been realized, to awkward effect, is CLF's name change. The company, formerly known as Cleveland-Cliffs, recently dubbed itself Cliffs Natural Resources in anticipation of the deal's successful closure.

Cliffs hasn't indicated yet whether it will revert to its maiden name, but the split-up appears to be somewhat amicable -- Alpha has agreed to dismiss the litigation pending against its former suitor. In early trading, CLF is up 1.8%, while ANR has plunged roughly 12% to hit a new annual low of $21.80.

The gaming sector was back in the headlines this morning, as Las Vegas Sands proudly announced that that it has "sufficient liquidity and capital resources to both fund its ongoing operations and to execute its updated development plan." The company cited its recent efforts to raise $2.1 billion in capital for the added liquidity. The shares were last seen higher by nearly 3% heading into the close.

The picture isn't quite as rosy at MGM Mirage This afternoon, MGM announced that it is actively exploring the sale of "non-core assets" to improve liquidity. Jim Murren, MGM's president and COO, said that the firm has already sold 1 of its planes and has put 2 more up for sale. Murren also noted that the company is looking to get rid of some of its undeveloped land on the Las Vegas Strip and elsewhere. "We have an awful lot of land on the Strip, in the county and in the state," he said. "Land prices may be down but in many cases they are still far above what we have on our books." Through the sale of these assets, Murren estimated the company could raise about $300 million.

In late trading, MGM was off about 0.6%, with the shares hovering just above long-term support at the 10 level. This area has buoyed the stock since late October, and a breach of this support could send the stock on another downleg. Sentiment toward the equity is heavily bearish, with the stock's Schaeffer's put/call open interest ratio (SOIR) of 2.13 falling in the 86th percentile of its annual range, while 11 of the 16 analysts following MGM rate it a "hold" or worse.

Returning to LVS, despite the stock's strength today, the shares have more risk from an unwinding of heavy investor optimism. The equity's SOIR of 0.57 rests at an annual low, indicating that options traders have not been more bullish toward the shares at any point during the past year. With technical resistance looming overhead in the form of LVS's 10-day and 20-day moving averages, a rejection here could send these option bulls scrambling for the exits.

The hits keep coming for solar sector concern Suntech Power Holdings On November 6, Merriman Curiman Ford downgraded the stock to "neutral" from "buy," while on November 11, Simmons & Company cut the stock to "hold" from "strong buy." This morning, Jefferies took aim at STP, lowering its price target on the shares to $25 from $70. The brokerage firm maintained its "buy" rating on the equity.

The shares have parlayed this negative news into a 2.5% gain on the session, however, with STP rebounding from support in the round-number 10 region. Technically speaking, there is room for a short-term bounce from the stock. Resistance lingers overhead at the 12 level, but the security doesn't hit a wall until the 13.50-15 area, which is home to its 10-day and 20-day moving averages.

Unfortunately for STP, there is plenty of room for more ire from the analyst community. According to Zacks.com, 10 of the 13 brokerage firms following the shares rate them a "buy" or better. Meanwhile, Thomson Financial reports that the average 12-month price target for STP rests at $35.13 per share - a 215% premium to the stock's current trading range near $11.13 per share.

I guess losing out on the Chicago Cubs was the least of Mark Cuban's worries. According to this blurb over on The Wall Street Journal, Cuban (owner of the Dallas Mavericks and spurned suitor for the Chicago Cubs) is the subject of insider trading charges filed by the Securities and Exchange Commission (SEC). The government alleges that Cuban sold all of his 6% ownership stake in Mamma.com on June 28, 2004, after learning that the company was raising money through a private investment in a public entity (PIPE). This move (when new shares are issued at a discount to the current trading price) came the next day, with the company falling by more than 10%. According to the SEC, Cuban avoided more than $750,000 in losses.

Scott W. Friestad, Deputy Director of the SEC's Division of Enforcement, noted that "Mamma.com entrusted Mr. Cuban with nonpublic information after he promised to keep the information confidential ... Less than four hours later, Mr. Cuban betrayed that trusty by placing an order to sell all of his shares." (The preceding quotes came from this CNNMoney article.) Taking a look at the charges, the SEC contends that Cuban was told of the PIPE move (as the company's then-largest known shareholder) and decided to dump all 600,000 shares before the announcement. One thing is certain: no matter the outcome, this will get interesting.